Our FinTech roundup also covers the CFTC’s new climate risk unit, and collaboration efforts for Broadridge & AccessFintech, and AcadiaSoft & LIKEZERO.
Fireblocks Raises a Total of $179 Million
Crypto infrastructure provider Fireblocks has raised $133 million in Series C funding with help from the Bank of New York Mellon and SVB Capital, the investment platform of SVB Financial Group, via an effort led by Coatue, Ribbit Capital, and Stripes Group, officials say.
With this round of financing, Fireblocks has “a cumulative total of $179 million raised to date. With the new injection of funds from strategic investors, Fireblocks will continue to expand global resources to service the world’s biggest banks and fintechs and connect them to the entire crypto capital markets,” according to the Fireblocks officials.
The Fireblocks platform is intended to help banks and traditional financial institutions to “rapidly deploy custody, tokenization, asset management, trading, lending and payment solutions across public and private blockchain networks,” according to Fireblocks, says Michael Shaulov, CEO of Fireblocks.
Fireblocks has grown over the last three years to be an institutional digital asset transfer and wallet network “trusted to secure more than $400 billion assets for its customers,” officials say. Strategic investor, BNY Mellon, the world’s largest asset servicer, announced earlier this year their commitment to accelerate the development of enterprise solutions to service the rapidly evolving digital asset space.
“Developing products to bridge digital and traditional assets is foundational to the future of custody,” says Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, in a statement.
CFTC Launches Climate Risk Unit
Rostin Behnam, the CFTC’s acting chairman, has established the Climate Risk Unit (CRU) that will focus “on the role of derivatives in understanding, pricing, and addressing climate-related risk and transitioning to a low-carbon economy,” officials say.
The interdivisional group has staff members “from across the CFTC’s operating divisions and offices,” officials say. “The CRU is intended to accelerate early CFTC engagement in support of industry-led and market-driven processes in the climate — and the larger ESG — space critical to ensuring that new products and markets fairly facilitate hedging, price discovery, market transparency, and capital allocation.”
By leveraging the CFTC’s personnel and expertise, the regulator will take “thoughtful and deliberate next steps toward building a climate-resilient financial system,” Behnam says. Previously, Behnam led the effort to establish the Market Risk Advisory Committee’s Climate-Related Market Risk Subcommittee and requested the September 2020 report on Managing Climate Risk in the U.S. Financial System, officials add.
“As the U.S. joins governing bodies around the world in recognizing the need to reduce carbon emissions, the derivatives markets regulated by the CFTC will play a vital role in supporting and developing new products and solutions that address climate and sustainability challenges,” CFTC officials say.
In addition, the CRU will have ongoing outreaches and “proactive engagement with the exchanges, clearinghouses, industry groups, and market participants,” about new and emerging risks “related to climate change and the impact of extreme and increasingly frequent and severe weather events and how such climate-related market risks are being or ought to be addressed in a fair and equitable way,” according to the CFTC.
Broadridge & AccessFintech Focus On Settlement Woes
Broadridge Financial Solutions is partnering with AccessFintech to resolve multi-party settlement fails via Broadridge’s post-trade platforms and data, and AccessFintech’s cloud-based operations workflow model, officials say.
Their combined efforts have yielded the Strategic Gateway for Settlement Workflow that is a global network of participants for sharing consistent data with multiple counterparties, help with onboarding, and the ability to “compare data automatically and resolve settlement exceptions efficiently,” officials say.
Both vendors say the effort is intended to help banks, broker-dealers, prime brokerages, and custodians achieve “cost savings, reduction of operational risk, expedited resolution of settlement fails, and a seamless experience for their buy-side clients,” according to officials.
“The volatility in the securities market over the past year highlighted the industry’s need for a more efficient settlement process that promotes market liquidity,” says Vijay Mayadas, president of capital markets at Broadridge, in a statement.
“The process of resolving settlement failures is manual, involving offline and time-consuming channels such as email, phone calls and chats between multiple counterparties. This leads to greater operational risk, inefficiency, a challenging user experience, and regulatory non-compliance under the Central Securities Depository Regulation (CSDR) requirements expected by February 2022,” according to Broadridge.
AcadiaSoft & LIKEZERO Work on Document Digitization
AcadiaSoft, a collateral management automation provider, is working with LIKEZERO, a data capture and contract analysis technology vendor, to offer data services via AcadiaSoft’s Agreement Manager, and to integrate with LIKEZERO to offer solutions for the smart management of agreement data, officials say.
“Maintaining and amending legal agreements is complex, time-consuming and costly,” says Fred Dassori, chief product officer at AcadiaSoft, in a statement. “Our goal at AcadiaSoft is to provide an interconnected framework for the industry that allows clients to manage legal agreements in a centralized location — bringing new value to what were previously siloed records with limited interoperability.”
The partnership with LIKEZERO will let market participants “digitize and access legal agreement data via Agreement Manager,” Dassori says.
The Agreement Manager will enable clients to “extract, transform, and load legal data into the platform, allowing firms to fully integrate the solution with a minimal impact on their internal IT infrastructure. Once a common record exists within a shared infrastructure, disputes between counterparties will be largely eliminated and allow for data-driven decision-making and event management. The standard data representation is made available to additional client-side applications from a controlled environment, resulting in a significant reduction in the friction that currently drives up costs,” officials say.
The AcadiaSoft / LIKEZERO partnership also allows clients to access broader contract analysis services.
“Clients can extend the data sets they capture from derivative agreements or use the service to solve a wide range of regulatory change challenges such as LIBOR transition, Force Majeure, Negative Interest and Brexit,” officials say.